In the past a foreclosure or bankruptcy were two situations that could have prevented you from acquiring a new housing loan from the Federal Housing Authority right away.Because of this, families or individuals who wanted to own a new home a year after an unexpected economic crisis were left with no choice but to approach other financing agencies that offered loans with higher interest rates or down payments.Fortunately, the FHA has recently released a bulletin to change their policy. Now, you are allowed to apply for a new home loan with them in as short as one year after a bankruptcy or foreclosure. There are several conditions you must meet prior to being approved for this new program.
First, you must provide proof that the foreclosure or bankruptcy was caused by factors that are beyond your control, like a drop in business profits due to the dwindling economy.
Prior to this change, the death of a spouse or a medical crisis was the only exception that would make you qualify for a housing loan a year after foreclosure.
Second, you must, for a term of one year, pay your financial liabilities regularly. This would include your credit card bills and rent if applicable.
Third, you need to undergo housing counseling that is conducted by an authorized agency.
Once you have met these conditions, you can then apply for a new loan with the FHA.
Including the loss of income in their list of exceptions is a good sign that reflects how the FHA is reassessing their policies to meet the current needs of the people.
No matter how careful homeowners are at managing their finances, a recession can affect everyone. That is why the FHA is being more supportive of people who want to get back on their feet after a huge financial crisis.Please contact us if you would like to learn more about financing a home with an FHA loan.